tv Bloomberg Markets Asia Bloomberg February 12, 2020 10:00pm-11:00pm EST
can charge higher duties on certain goods than the u.s. can. singles' day shopping frenzy. this is bloomberg's markets asia. e.u. lawmakers in upcoming talks with the u.k. parliamentarians adopted key proposals ahead of a meeting in haslinda: asian markets are brussels later this month. in a deepening divide mixed about halfway through the session. let's get the latest on the markets from sarah ponczek. i know that investors were first over future trading relationships. convinced that coronavirus is the top advisor to japanese pretty much contained, then out prime minister shinzo abe says come the numbers. questionare absolutely the government must take the lead if the coronavirus hurts the economy. a yale professor emeritus says marks now in the situation. we do see markets across the that the infection could be a asia-pacific region trying to significant drive and fiscal claw their way back into the green. policy must adapt if required. you see the shanghai composite he added that pushing the boj into further easing would not be down by less than 0.2% after an effective response. seven straight days of gains, the longest winning streak since global news 24 hours a day
2018. the hang seng down less than powered by more than 2700 journalists and analysts in more 0.1%. the msci asia-pacific index than 120 countries. clinging onto gains. i'm su keenan. paul: thanks. where we see the most pressure is in s&p futures. staying with the fallout from the coronavirus. down roughly 0.3%. a number of new cases and deaths from the outbreak in china. that after the benchmark did close at a record high. i want to give you a look at the the center of the epidemic sector view. counting.s beingest performer there are almost 50,000 cases. technology and real estate. tech up 0.3% now. on the ground, selina wang in calling to the downside, health beijing. tell us more about this new care and finance. methodology. change is a massive year-to-date, health care is one of the best performing sectors. back to you. paul: thanks. leing to a massive jump in the number of confirmed cases, sarah ponczek there. let's check in on the first word nearly 15,000 today. alongsidedding cases news now with su keenan. su: we start with the latest on oil. those confirmed with the thechiefs privately warning previous testing kits. previously, many patients could
trump administration that they will struggle to produce the oil and gas that china has committed not be diagnosed as positive to buy. beijing would order about $52 without additional testing. there have been reports of billion of energy, the people waiting in line for hours equivalent of an extra one turned away. million barrels of oil. the american petroleum institute says that would place a severe strain on current capacity. the u.s. is weighing a plan to it seems possible that with this raise its long-standing ceiling new categorization it could be onrenegotiation with the world over counting the number of cases. but it does ensure that people trade organization. that are sick are getting the treatment they need. this is the best option in the government's view. cases,nearly 15,000 around 13,300 are from this new category of clinical diagnosis. theinda: yvonne, what is latest in hong kong? >> not the news that a lot of parents were hoping for. they are saying now that they
will not be resuming school beforearch 16 or not march 16. that is still two weeks later than the previous plan. we are talking about another month where schools will be closed. kids will be stuck at home. the government is urging students to stay home at this time. we will be talking to some experts on when to decide whether to resume school again and whether schools are prepared. they've also been considering ways to possibly delay entrance exams. we heard from the secretary of education that perhaps university entrance exams limit room for movement. but they are encouraging students to use e-learning platforms during these campus closures, which i guess could be a good thing. i was still going to school during the sars epidemic in hong kong and i remember having to
fax in my essays and quizzes. at least technology is on their side. haslinda: how times have changed. what are chinese officials saying about the impact of the economy? >> china's top leaders are still urging to meet those economic targets even amid this downward pressure. thatnping is optimistic china can still meet its economic goals. boosting investment projects. you do have economists that are turning more pessimistic. the s&p estimating growth could be as low as 5%. here in beijing, it is incredibly quiet. many cities look like ghost towns. people staying at home in their apartments. china closing some 30% of
the restaurants in china. there's clear evidence that factories are still struggling. the global supply chain has been disrupted. even if the worst of the virus there are higher numbers of bankruptcies, layoffs, so even with the moderate monetary fiscal policy, there could be significant continual downward pressure. selena talkingd about the supply chain impacts working their way through. what impact have we seen on the corporate sector so far? >> we were talking earlier about earnings. everyone wants to know what is the guidance for 2020. when it came to topline growth, the impact from the virus would be 1% to 2%. they are offering a six-month
moratorium when it comes to loans in singapore and hong kong. they are trying to provide some liquidity to their customers after this virus hit them at home. more than 300 employees had to be evacuated from their headquarters in the lion city. mgm resorts withdrawing their guidance for 2020 due to the with operations in macau as well as las vegas. that the mentioned outlook is unpredictable. a separate issue with the ceo stepping down. it could impact 1% to 2% of revenue going forward. yvonne man in hong kong and selina wang in beijing, thank you so much for that.
let's get more on the impact on asian currencies. good to have you with us. the reaction has been pretty measured compared to the reaction in the stock market and bond market. what would it take for it to tilt either way? >> the currency market is more concentrated. the euro-dollar is falling slightly dollar-yen is very resilient. what will really drive the next move is if there is a bit more of widespread fear. the next move will be in asia. we know the currencies that are typically vulnerable would be the thai baht and the sing down her. the pboc wants a
stable yuan. what level are you looking at? >> interesting that you should mention. pboc hasn't released its level. want to haveesn't a second complication. i think in the grand scheme of things, if you look at how the virus is playing into the chinahina trade tensions, -- just announced last week [indiscernible] let's say the virus gets a bit worse. [indiscernible] you see the offshore
yuan going through seven again, and if it did, would it be short-lived? case for u.s.e a dollar strength as well. >> the case for dollar strength would be mostly limited to quarter one advance. is offshore chinese yuan more accurate on china's gdp growth. if the virus were to get a bit more worrisome, we do not doubt the offshore chinese yuan could be -- [indiscernible] but the upside limit would also be countered by the fed getting a bit more dovish and cautious. mentioned the fed there. of the best-performing currencies in the past 24 hours was the kiwi dollar, performing strongly, but can these trade
exposed economies like new longnd and australia, how can the central banks sit on the sidelines? economies like that, at the moment, the virus has not really spread into these economies. how the a matter of currencies are affected. if you look at the australian dollar, the direction was driven by very much lower iron ore prices. -- thensition mechanism central bank itself doesn't see a need to counter the economic impact to easing. right now the real impact is in terms of trade haslinda: haslinda:. haslinda: a lot of the optimism is based on the strength of the
u.s. economy. this chart shows that the chances of a u.s. recession is moving up. for are the implications the rest of the world? is aboves. economy trend growth. we believe it has the potential to go below trend, given the in thestimulus is fading final years of the presidency of donald trump. what it takes for the u.s. to go into outright recession is if the virus situation were to be a lot more widespread. china could mean a lot as well. powell is aware, but still pretty relaxed about the virus, he mentioned something very interesting in his latest fomc meeting. the level of
inflation and that is a very clear message for us. easeans they are likely to if there is anything that is going to damage their economy. haslinda: still to come, we will look at india's soaring atlation, which is rising the fastest pace since prime minister modi took office, and ask what it all means for the r.b.i.. the cofounder of the digital telecom service provider joins the show after getting a big investment. this is bloomberg. ♪
paul: the prices of food and fuel in india rose at a substantial rate for six straight months in january. levels since may 2014 when prime minister modi first took office. the reserve bank of india expects price pressures to ease. the r.b.i. capped rates unchanged last week. more on all of this. teck is still with us. the r.b.i. believes inflation will pull back. what is your reading of the situation? at --hink if you look [indiscernible]
compared to december, where it rose more than 300% year on year, still very high. i think the r.b.i. is well justified to look at inflation. is that it is preventing them from easing further. once i believe the inflation issue goes away, there will be rate cuts again. paul: to your point about growth, i want to bring up this chart on the bloomberg terminal. since at the slowest pace 2009 while inflation remains high. does this raise the specter of stagflation, and how does the r.b.i. and the modi government
respond to that? ofthe issue is that the form stagflation is causing by supply-side issues, especially food in particular. the incentives to use monetary stimulus to stimulate demand is not effective. i think the only option is to byp household spending power giving out food subsidies. the amount of easing is actually quite ineffective. i believe the government will use more of its stimulus. everybody is watching to see the possible impact of the virus on the indonesian economy. how insulated is indonesia?
this is one central bank governor who has the ammunition to take on the challenges. >> the good thing about indonesia and economies like india, philippines, is that in terms of the exposure to chinese , they are not the most exposed. their economic growth is reliant on demand. from an economic point of view, they are one of the central banks that it is the least on a relative basis. indonesia is also growing at 5%. happen iswhat could the virus situation keeping the fed more on the dovish side. [indiscernible]
cases. let's dive deeper now into the markets. david ingalls in hong kong. what are you seeing? >> two things. numbers, wencreased were looking to see whether the able to recoup holiday losses. about 2.5% away on the shanghai composite, although i should mention one group within the market that is seeing a lot of buy-in today is the property index in shanghai. it is up over 1%. seems tohe situation be getting worse, you are getting a lot more rhetoric out of beijing. expressed to be
sometimes to the banks. in this case, perhaps more flexible policies and the housing space might lead to valuations moving up as well. that is according to an analyst. david, china is the bi several things to note. we are trying to figure out how -- the initial shock will be [inaudible] stanley was out with an interesting note. -- 13.7 saying between million tons is what that impact will be. that being said, what they are saying is it could be a temporary surplus initially, but
on dbs,eeping an eye ,urrently up by 4/10 of 1% meeting expectations. atte a revenue, coming in $1.51 billion. it evacuated about 300 employees on the eve of those earnings concerns. coronavirus eat expect the virus to into revenue by 1% to 3%. that's get first word headlines from su keenan. su: we start with the number of officially diagnosed cases of coronavirus in china. the number has surged. this after hubei province began added those suffering from the infection confirmed via imaging scans alongside those with previous tests. the number of infections rose by more than000, with 13,000 coming from the new
method of diagnosis. hubei's death toll rose by 242, patientst 35 hundred have been discharged since the outbreak began. schools across hong kong will be closed since march 16. this after the date was extended by two weeks. classes were set to resume on march 2, but that has been pushed back due to the coronavirus outbreak. the superintendent will decide when to reopen schools based on expert advice. students have been advised to make use of e-learning during the closures. opec is slashing its forecast for global oil as the virus hits demand in china and further afield. the cartel projects reduction by about a third. saudi arabia wants an emergency
meeting to to consider new production curbs. taiwan is lowering its forecast for growth this year with a virus outbreak set to weaken production and consumption. gdp is now seen expanding by about 2.3%, down from a previous projection of 2.7%. the infection is also seen as pushing thailand closer to recession. growth last month was close to 1% as tourism plunged. the electronics industry has scrapped its biggest annual showcase since the coronavirus at break sparked an absence of delegates ahead of the rollout of 5g. it is the first time in the mobile world conference barcelona's 33 year history that it has been called off. it usually draws 100,000 participants from around the world to see new products and cell phone innovations. global news 24 hours a day, on
air and on quick pick by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> thanks, su. stocks mixed in asian trading. our process at reporter's in new york. fairway latest report ranch into the risk rally? >> it certainly does raise the level of uncertainty. we have seen markets fluctuating throughout the training day, but if you were to look at the csi 300 and shanghai composite, we do see mainland stocks falling to their lows of the session, both benchmarks down half a percent or so. some are saying this is actually encouraging because may be chinese officials are being more realistic about the situation, but on the other hand, if we are seeing a spike in coronavirus cases, we do not know if this
was a one-time happenstance to change in methodology, or if this is going to be the start of something worse going forward. hopefully by tomorrow, when we get the new numbers reported, we .ill have a better idea but considering the amount we saw added with the new cases, you could say the market is relatively resilient. brent and crude up right now. what is the outlook for oil? sarah: oil holding onto gains, but very slightly. we have seen prices coming down throughout the trading day. .ti crude was up 1.5% but opec came out and cut their first quarter oil demand forecast by a third of the entire forecast, but still you have the energy minister alex novak meeting with officials, trying to assess whether or not a further cut could be in the
cards, but it has been a rough ride. wti down about 5% in the last year, but a year to date, down 15% from the highs of the year down 18%. will be interesting to see what the current a virus outlook looks like and if demand will start -- what the coronavirus outlook looks like in of demand will start to pick up. haslinda: thank you so much for that. singapore -- he is looking to shake up the telecom market. the digital telecom services provider is looking to expand into new markets. it holds more than 5% of market share in the city state and has ended taiwan and australia. it recently snagged funding from warburg pincus. let's discuss the strategy. the first question, quantify how big the investment was. this is a private equity firm
that has $58 billion in um. -- yuan. >> i think it is substantial for us. the thing is, what does substantial mean? for us, it is something that allows us to grow in the markets, but not only that, but also allow us to expand to more markets. to change the way people experience telcos. to do that worldwide, we did lots of funding. with theelationship investors is not about capital. they dabble not just in the telco side of things. they invested previously in upgrading technology companies. they are the ideal investor for us. we are very excited about the future.
backers, you had huge sequoia and now warburg pincus. how are you capitalizing on these big names? >> that's a great question. sequoia came in and a time when justre just in singapore, had 15,000, 20,000 subscribers. they injected the sense of what does it mean to be a technology company, how to grow the team, how to think about theonalization, how to grow leadership team from a to b to c. it is i was hopeful to have the singapore government support you, especially when you go into a space like that. warburg has come in at a time when we are on the cusp of explosive growth, so from that perspective, it is pretty exciting for us, and it will help us reach new markets as well as [indiscernible] peter: you've got some private equity money, a substantial amount.
you have expanded into a couple new markets, but his circles less profitable? >> that's actually a great question. it is profitable in singapore. that is the beauty of this business model. everything we do is sent from the cloud. we managed to cut the cost for planning and operations by a factor of 10. we cut the capex completely. haslinda was saying earlier, we broke past 5% and while ago in singapore. we hope to do that similarly in taiwan and australia. in the next 12 to 18 months, you will hear about profitability there as well. but does it come at an expense at all for customer service? ishek: it's quite the opposite. you will hear this over and over
again. they say, give us the same kind of service that might uber gives me, or facebook or airbnb. what is the right metric to compare these experiences? -- the score around the world for telcos is negative. in australia, it's positive 15, taiwan, positive 15. you create massive cuts. customer outcome is what we actually stand for. one of our missions is power back to customers. we stand behind that, and it comes at a higher cost. i would rather have better customer experience than have lower costs. you are also launching nonrelated telco services. are you trying to be everything to everyone and will that strategy actually work? be everythingan't
to everyone. that would be a departure from the vision of the company. we believe in making sure we hit profitability,- but when it comes to other services, we are looking at lifestyle services. we have lunch a couple in singapore that have really taken off. you answer a question, mcdonald's or burger king. that has been played to million times in singapore. and we launched discovery of events and experiences. this is the first ai driven event cap. we are sitting on a gold mine of knowledge about the customers. haslinda: just one question, are tion ofng an uber-iza telcos with the technology we are seeing? >> not as much as we should, and
part of the reason, telcos have not been acknowledged enough. we are perhaps the words first tell -- the world's first telco operating system. years,next three to five it is digitization that is going to enable growth. haslinda: we have to leave it there. the circles.life co-founder joining us here. i couple of headlines to tell you about, actually just one, ugby'sore r seventh tournament will be delayed on virus concerns. this comes on the back of the one in hong kong being canceled as well. it is canceled in barcelona as well. still to come, fresh doubts are raised about phase one of the u.s.-china trade deal. big oil warns that both sides have trouble for filling their ends of the agreement.
>> we are getting breaking news, virus related again. this time, taiwan saying it will provide subsidies to firms who were hit by the virus or are struggling with the virus. firm. more questions are being raised about the success of president trump's phase i deal on both sides of the agreement. have warned leaders the u.s. will struggle to produce the energy products china has committed to buy in the deal. let's bring in dan murtaugh. the question is, can china meet the promises made for the trade deal?
dan: even when the trade deal was announced in january, it was a big number, 50 billion dollars in u.s. energy and agriculture purposes. it would have been possible, but now it is the demand destruction we are seeing from this coronavirus, with cars being off the roads, planes and staying on the runway. there has been a huge decrease in oil imports and oil processing. veere is a real question of the appetite for energy, for oil, for gas, and even for agricultural goods that they have promised to buy from the u.s. andan am of the appetite the demand is one half of the issue. what about the concerns that the u.s. would be able to export enough to meet the terms of the deal anyway? dan: that's an interesting one. when the deal was announced, wrote ahad a really big whole with this. learning the american
petroleum institute warned the administration that u.s. oil experts might not be able to meet the needs. i am a little curious about that if the oil were rerouted to china, it would need to the trade deal requires, but if you wanted to add exports on top of that, that's where you run into logistical problems. haslinda: you have to wonder what it means for the phase two trade deal. goingeah, the impact is to hang over everything with the u.s. as they try to move forward and get this phase two deal worked out by the end of this year. paul: thanks for joining us. india's markets have just opened. mumbai. to take us through what to expect from today's session.
higher in the last two sessions. how are we looking at the open today? a muted start for the indian equities. ie are looking at the nif trading at levels in the opening session. -- at the nifty trading at lower levels in the opening session. the markets have started with a bit of cuts. volatility indices, we have seen in the weeks coming off of levels of 17, 18 to now almost 12 or 13 in the last few weeks. weekly options expiring for indices like the nifty bank. we can expect a bit of volatility. i think markets will be reacting to the inflation numbers that came in yesterday for the month of january, 7.59%, above what
.conomists were picking at 7.4% retail inflation has spiked to the highest level we have seen since mid-2014. and henderson unilever among stocks you are watching. >> yes. most importantly, commentary will be in focus. if you look at the numbers exciting to be muted, the revenues are expected to be higher, but just about 11%. margin, growth defining a key number for oil refining companies, is expect it to be $3.4 billion per barrel. unilever had been trading at all-time high levels. it was up by 5% yesterday.
it is also trading above bloomberg consensus 12 month target price of 20 to 12. yesterday, there was a report highlighting the earnings visibility for the companies for the next two years. this was given a target price of about 24.90. back to you guys. paul: all right, thanks for joining us in mumbai. just want to get you across more breaking news out of taiwan. we did mention that taiwan would tovide interest subsidies firms hit by viruses. taiwanese 60 billion dollars in the budget, and a 50 billion taiwanese dollar boost for tourism and transportation. more news on the support coming businessesan for the hit by the virus.
paul: let's do a check of the latest business flash headlines. bloomberg intelligence says taz lobo probably have to raise spending, which could lead to will probablya have to raise spending, which could lead to losses. morewill need to hire sales and service staff to boost sales outside its home market. riskssaid elon musk slowing technical advances by restricting spending on r&d. haslinda: the softbank boss is scaling back his plans for a second tech vision fund, saying it could become a two-stage deal
with a smaller initial phase. phase two, he says, could be led i softbank itself. his reputation has been battered by a series of missteps, including a botched ipo by office sharing startup wework. haslinda: shares of mgm resorts tumbled in late trade after it where the deer its earnings forecast over 2020 -- withdrew its earnings forecast for 2020 over the coronavirus. announced that longtime chairman and ceo jim maron will leave the company before his contract expires, but he will stay on until his successor is named. southeast asia's largest phone companies all profit fall in the third-quarter, but the
coronavirus outbreak hit income. haslinda: and, of course, that would result this morning, dbs built market expectations. q revenue coming in a tat higher than what was expected, billion. $1.49 an increase of 14% on the year. also up by 14%, return on equity , and a new record high of 13%. the upside in the earnings coming on the back of better lending, also better performance in its wealth sector. all in all, showing some resilience. the question is, what happens from now on because of the coronavirus? it will impact part of the revenue going forward by up to 3%, but that's on the condition that the virus is pretty much contained by this summer.
a lot of questions being asked in terms of the quality of assets, as well, going forward. speaking of earnings, alibaba has result doing later thursday later thursday, and investors are awaiting any comments on the impact of coronavirus. is here with us. first off, what are we expecting? >> this is the october to december quarter we are talking about, right before the virus hits. it is likely the results are going to be very strong. we will see robust sales growth. but the company's guidance for the year is 33% revenue growth. we saw the company deliver very strong performance during single day -- singles' day november. with singles'n
day performance for the quarter is typically low historically, but i think increasingly the correlation is going to be higher because alibaba's monetization rates are rising and are very stable. but sales growth, i think, will be very strong. paul: do you expect to see competitive pressure on margins? >> margins have been coming down in the past one or two years, primarily due to competition on the payments front, on local services. but i think a lot of that has stabilized. the competition has become more rational. last year with the trade backdrop, companies have become more rational. investments have declined in general. alibaba has its eyes focused on cost control. i expect the margins to come down a little, because the revenue mix is still shifting to
faster growing sentiments such as the cloud computing business, but not really from competitive pressures. haslinda: any impact on the virus -- from the virus? >> i think it is going to be quite interesting, because we are only a couple weeks into the virus, so what alibaba faced will give us a good indication of what is going on, because they are a proxy for china consumption. when we look at it, on the surface, you would think online think demand will retail should certainly have a negative impact if people are locked up at home and not going out. they will think twice about buying apparel. on the supply side, alibaba just announced a couple of days ago that they will waive the phone service fees for t-mobile customers. so that is indicative of the challenges merchants and brands are facing, so we can think
about supply chain disruptions due to transportation, the just ask, and even production -- logistics, and even production. it is unclear what the true impact will be. all right, previewing the expectations for alibaba's earnings. that is it from bloomberg markets: asia. i'm a paul allen and city. sydney.ul allen in haslinda --d i'm bloomberg markets middle east is next. ♪
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